A constant cost industry has a long run supply curve that is horizontal, hence d. However it most cases a would be correct too, as supply is typically more elastic in the long run. The only case that a would not be correct when d is, is when the short run supply curve is also perfectly elastic. But d is the best answer.
Thanks Reckoner. But by constant curve, does this mean that marginal curve will be completely flat? Thus, the short run supply curve will also always be perfectly elastic?
Also, in general, when is short run supply curve more elastic than long run supply curve? (Something raised by my lecturer, but never discussed.)
(There really needs to exist a forum/discussion board for this subject...)
Not expecting anyone to answer the entire question
(I know everyone has exams...)
But just need help as to how the demand curve looks like. Will it be perfectly elastic or inelastic?
I know the supply curve will be perfectly elastic, but since everyone can purchase only one phone and at a maximum price, wouldn't the demand curve be perfectly elastic too...?!